Photo Illustration by Elizabeth Brockway/The Daily Beast

CRYP-D’OH

Forget Hacking, Thieves Are Stealing Bitcoins at Gunpoint

Hacking is hard. So Canadian thieves tried raiding a bitcoin company with guns.

01.26.18 5:06 AM ET

Photo Illustration by Elizabeth Brockway/The Daily Beast

In theory, bitcoin is virtual and anonymous. But as the much-hyped cryptocurrency goes mainstream, bitcoin owners are doing business under their own names—and thieves are taking advantage by robbing them at gunpoint.

Police in Ottawa, Canada, are on the lookout for two participants in a failed heist at a bitcoin business on Tuesday. Instead of stealing the digital currency by hacking, the would-be thieves entered the bitcoin sales office, tied up four employees, and demanded cryptocurrency at gunpoint, police say. It’s the latest in a series of kidnappings or robberies of known bitcoin owners.

Most bitcoin sales happen online, not in an office. But the cryptocurrency’s soaring popularity has led to a new crop of brick-and-mortar businesses that will do transactions in person. Located in a generic Ottawa office park across from a spaying and neutering clinic, Canadian Bitcoins is one of these physical stores selling the virtual currency.

Shortly after opening hours on Tuesday, police say, three armed men burst into the store and tied up four employees. The three would-be robbers allegedly demanded the Canadian Bitcoins staff to send them bitcoins on one of the store’s computers.

Even one bitcoin would be a jackpot for robbers. A single coin was valued at over $11,000 on the day of the attempted heist. In the process of the heist, one of the masked robbers hit one of the bound employees in the head with a gun, police say.

“On Tuesday, there was an attempted robbery at our office in Ottawa,” a Canadian Bitcoins spokesperson told The Daily Beast. “As police have mentioned, no one was seriously hurt during the incident, but one staff member did sustain minor injuries. Our focus is on supporting our staff at this time as well as working with the police in their investigation.”

The company’s bitcoin stash remains untouched. While the robbers tied up four employees in the front room, a fifth employee hid out of sight and called police, who turned up before the thieves could cash out.

Police arrested one of the alleged robbers, 19-year-old Jimmy St-Hilaire after a manhunt. He’s facing five counts of robbery with a firearm, five counts of pointing a firearm, and five counts of forcible confinement, plus additional weapons and conspiracy charges for the botched robbery where nothing was stolen. The other two suspects are still on the lam.

They aren’t the first to attempt such a heist. As bitcoin prices rise, owners of large caches have found themselves handing over virtual currency at the point of a real gun.

New York City bitcoin broker Dean Katz became one of the futuristic crime wave’s first victims in 2015. Like Canadian Bitcoins, Katz did in-person bitcoin sales. The business model backfired when a client asked Katz to meet him in a secure location, then forced him to transfer $8,500 in bitcoin and hand over $3,500 in cash, the New York Observer reported at the time. Months later, a New York City firefighter was reportedly stabbed and robbed of his bitcoin while trying to exchange it for cash.

Recent robberies have grown more sophisticated as bitcoin’s price rises. In November, Turkish officials announced the arrest of a group of five people who allegedly posed as police and forced a prominent bitcoin owner into a car, where they forced him to transfer 450 bitcoin: worth more than $5 million today.

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In December, thieves kidnapped head of a major Ukrainian bitcoin exchange on the streets of Kiev. Pavel Lerner, CEO of cryptocurrency company Exmo Finance was reportedly exiting his office when men in ski masks pulled him into a black Mercedes-Benz. They later released him after he paid a $1 million ransom in bitcoin.

But in Ottawa, it’s the first crime of its kind.

“We’re trying to educate ourselves a little right now about bitcoin,” Haarbosch said, “because this is the first one of these we’ve seen.”